Correlation Between ProShares Ultra and Innovator ETFs
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Innovator ETFs at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ProShares Ultra and Innovator ETFs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Ultra MSCI and Innovator ETFs Trust, you can compare the effects of market volatilities on ProShares Ultra and Innovator ETFs and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in ProShares Ultra with a short position of Innovator ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Innovator ETFs.
Diversification Opportunities for ProShares Ultra and Innovator ETFs
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ProShares and Innovator is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra MSCI and Innovator ETFs Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator ETFs Trust and ProShares Ultra is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ProShares Ultra MSCI are associated (or correlated) with Innovator ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator ETFs Trust has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Innovator ETFs go up and down completely randomly.
Pair Corralation between ProShares Ultra and Innovator ETFs
Considering the 90-day investment horizon ProShares Ultra MSCI is expected to generate 5.59 times more return on investment than Innovator ETFs. However, ProShares Ultra is 5.59 times more volatile than Innovator ETFs Trust. It trades about 0.02 of its potential returns per unit of risk. Innovator ETFs Trust is currently generating about 0.06 per unit of risk. If you would invest 4,060 in ProShares Ultra MSCI on August 31, 2024 and sell it today you would earn a total of 263.00 from holding ProShares Ultra MSCI or generate 6.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 27.16% |
| Values | Daily Returns |
ProShares Ultra MSCI vs. Innovator ETFs Trust
Performance |
| Timeline |
| ProShares Ultra MSCI |
| Innovator ETFs Trust |
ProShares Ultra and Innovator ETFs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Innovator ETFs
The main advantage of trading using opposite ProShares Ultra and Innovator ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Innovator ETFs can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Innovator ETFs will offset losses from the drop in Innovator ETFs' long position.| ProShares Ultra vs. ProShares UltraShort Financials | ProShares Ultra vs. ProShares Ultra Oil | ProShares Ultra vs. ProShares Ultra SP500 |
| Innovator ETFs vs. ProShares Ultra MSCI | Innovator ETFs vs. ProShares UltraShort MSCI | Innovator ETFs vs. SWP Growth Income | Innovator ETFs vs. Invesco DB Dollar |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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